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Last Updated: Saturday, 15 May, 2004, 09:23 GMT 10:23 UK
Your comments: Pension compensation
Pensions Secretary Andrew Smith
Pensions Secretary Andrew Smith unveiled the plans on Friday

The government has announced it will set up a fund of 400m to help the tens of thousands of people who lost all or some of their pensions when their firms went bust.

Key ministers and workers' representatives had been in talks for several days in an effort to arrive at an agreement.

Unions representing affected workers have welcomed the move, calling it a "victory for pensions justice and trade unionism".

We asked for your comments. This is what you had to say:


I would like to congratulate the government on its proposed compensation scheme for workers robbed of their pension.

It has managed to give almost nothing to almost no-one, with the agreement of the trade unions, and still tried to look good in the process! Spin at its finest.
David Skinner, Chairman, Shipham's Pension Action Group

The government advised people to pay into company pensions.

The compensation should come from the government, not from the pension companies as that would affect the people paying into their own pensions without company help.

Legislation should be passed so that the pension contributions do not belong to the company but to the pension fund, which should be held separately from the company.
Mrs S P Thorne

Members of final-salary schemes that were wound up but their companies remained solvent lost out in exactly the same way as companies that went into liquidation.

They should also be looked after by the new scheme. They also lost most of their pensions through no fault of their own!
Bernard Coonan

I had my deferred pension promise of 6800 pa wound up by my former employer who is still solvent.

This will not benefit me - and thousands like me - despite the fact that we are basically in the same position
S Crawford
It did this to cut business costs. As a result, I have lost more than 50% of my pension.

This political and cynical act by Labour to avoid defeat in the Commons will not benefit me - and thousands like me - despite the fact that we are basically in the same position.
S Crawford

The 400 million is a knee jerk reaction to stop a backbench revolt over the Pension Protection Fund.

Although the details have yet to be made public, it appears that the thousands who are deferred members of solvent employers who closed their schemes leaving massive deficits have been ignored.
Dave Skinner

Under the flawed 1995 Pensions Act it is a legal requirement that my husband's pension - accumulated over more than 20 years - be taken in its entirety and used to subsidise the pensions of those in his scheme who have already retired, leaving him with nothing whatsoever.

Sixty thousand deferred pensioners have been robbed of their pensions, not at gunpoint, but by legislation
Gillian A Macdougal

Poor performance on the stock market is not only to blame, the government is also responsible.

Sixty thousand deferred pensioners - who are also taxpayers - have been robbed of their pensions, not at gunpoint, but by legislation. They must be compensated by legislation.
Gillian A. MacDougall

I find it confusing why the government has to bail out these pension schemes. Don't get me wrong, I do not think it is right for these people to lose out, but surely the people operating the schemes should pay?

Should we not be looking at the pensions industry itself, the actuaries and consultants which were employed by the trustees?

I have a money purchase scheme, which means all the risk is placed on my pension fund.

I find it confusing why the government has to bail out these pension schemes
Philip

If there happens to be a stock market crash when I decide to take my benefits I will end up with next to nothing. Should I expect the government to bail me out if this happens?

I cannot really see any sort of pension scheme where risk is not involved, whether to the company or to its members.

It is like car insurance, some people pay for years and years and never make a claim, when others claim several times. Should I as a careful driver be asking why my insurance premiums have increased when I have never made a claim?
Philip

I see these pensioners as worthy of compensation in full. The proposed scheme is not up to what is required. Its intention is simply to quieten things down for a while. The 400million may sound a lot, but spread over 20 years, it works out at an average of just over 6 a week.

If you take out the likely cost to the taxpayer of means-tested pension guarantees for people left with nothing, there probably is no new money involved at all.
Michael Woodman

I was made redundant at 50 years of age, and then had an uncertain future made even worse when I lost 90 % of my promised pension, through no fault of my own when the company went into liquidation.

I was encouraged by successive governments to make provision for my retirement - which I did - and nowhere did it say there was a risk involved in this investment.

It does look as if - through pressure - the cases are starting to be taken seriously
Ian Jones

I ask others to try to sympathise with this situation. I am too old to make up anything like the pension contributions now, so where am I to turn if not to the government?

This new scheme is a good start, but the details are hazy, and it will be many months before we know who will get anything. But it does look as if, through pressure, the cases are starting to be taken seriously.
Ian Jones

I was lead by the government, the NAPF, OPAS, OPRA, my employer, trade unions and the media, to believe that my pension was detached from the company, protected by law and guaranteed.

In reality, now my employer has gone bust, I find they all lied.

The private pension scandals of the 1990s slip into insignificance compared with this disaster
Andrew Parr, Pensionstheft.org

At the age of 60 I find my pension has vanished, and despite full time employment for 40 years I will have to rely on the state.

The state misled us all, the state should pay.

The private pension scandals of the 1990s slip into insignificance compared with this disaster.
Andrew Parr, Pensionstheft.org

The taxpayer may be bailing out these people, but nothing to what we pay for those who are unemployed, or are sick, or in prison.

Also, is the taxpayer not being asked to cover the 400 billion plus black hole that is currently facing the public sector pensions?

In comparison, the amount for final salary people is a tiny drop in the ocean.
Liz Kwantes, Equitable Life Members Support Group

My employer is still a functioning, profitable enterprise. Our final salary pension scheme was wound up some years ago and replaced with a money purchase plan.

The final salary fund is presently under funded and our pensions from this source will be a fraction of those promised to us when the scheme was wound up.

The government's complicity and reluctance to correct the matter really upsets current and future pensioners.

During the 80s and 90s in agreement with, indeed, as guided by, the government, my firm took payment holidays as the pension fund performance was so good.

Our action is based on the promises that were made to us by our employer and the inability of the law to enforce this contract
Chris Hulatt
I believe this practise was encouraged by the government as this pension money then became profit which of course attracted additional taxation.

We have spent considerable sums of our own money chasing this matter through the ombudsman, trying to gain a ruling to force our firm to make good the damage done by taking these payment holidays.

Our action is based on the promises that were made to us by our employer and the inability of the law to enforce this contract.
Chris Hulatt

Public money should not HAVE to be used in this way.

But it is a failing of British legislation that company pension funds are not ring-fenced, as fund-members' property to which the employer has no entitlement.

As a general rule, the employee's contribution is taken from his nominal salary and the employer undertakes to make contributions on the employee's behalf.

The money concerned should be set aside for pension purposes only. The only dispute that should arise is in the event of maladministration by the fund trustees.

The winding-up of the company should in no way lead automatically to the winding-up of the fund.

I see no attempt at the fairly simple legislative reform required to prevent what amounts, morally, to pension theft
Peter Bissmire
Britain seems to be one of the few countries in which a company can legally set up a pension fund that is not subject to the protections mentioned.

Putting it crudely, the company's creditors have a right to company assets but not to my pension, which is an asset in which the employees (fund-members) have a stake, not the company.

While government protection funds are being set up, I see no attempt at the fairly simple legislative reform required to prevent what amounts, morally, to pension theft.
Peter Bissmire

According to Ceefax the 400m will cover the 60,000 unfortunate pensioners involved, over a period of 20 years. Not, it seems 400m a year.

That works out to about 333 per year, which seems derisory.

Have I misunderstood the whole thing or is this another case of flinging out a figure in millions and expecting no-one to do the necessary calculations?
Anthony Craig

Whilst I have every sympathy for those who have lost their pensions, listening to the man who wants his pension reinstated in full is going too far.

It is not my fault as a tax payer that this has happened, bad management and world economics may have contributed but not me.

Am I, as a taxpayer now underwriting every pension scheme in the country?

This is a slippery road for the taxpayer as it has no bottom to its cost.
Ted Dilley



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SEE ALSO:
400m deal for lost work pensions
14 May 04  |  Business
Blair hints at pension help
23 Apr 04  |  Moneybox
New hope for past pension losses
13 Sep 03  |  Moneybox


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